Google is among the companies arguing for limits on software patents. / Ryan Anson, AFP/Getty Images

by Richard Wolf, USA TODAY

by Richard Wolf, USA TODAY

WASHINGTON - Supreme Court justices still don't use e-mail very much. But when they take their seats on the bench Monday morning, they'll be faced with a computer conundrum worth billions of dollars: What new apps should get patent protection?

It's one of the biggest patent cases the court has heard in recent years, and it's gotten plenty of clicks from some of the nation's biggest computer giants - IBM, Microsoft and Google among them.

While other high-profile legal disputes dominate the public's attention, from the fate of President Obama's health care law to the National Security Agency's phone surveillance, "this issue in many ways is more important than those issues for the long-term stability of the United States," says New York University law professor Richard Epstein.

The question isn't whether any computer software should be patent-eligible. Rather, it's what qualifies for a patent in a nation where the number has grown from about 2,000 software patents issued in 1980 to more than 40,000 a year, creating a glut of more than 400,000 on the market.

The argument on both sides is the same: What spurs innovation? Those favoring existing patent protections say a court decision that makes them harder to get will reduce the incentive to invent new applications. The other side contends that the sheer volume of patents today harms innovation because of the cost of lawsuits for patent infringement.

Software patents dominate the legal landscape much more than any other form of patent. They accounted for nearly half of all patent lawsuits in recent years. In 2012, there were more than 5,000 patent lawsuits.

Fueling the trend are so-called patent trolls known for making their money by suing competitors. Congress is working on bipartisan legislation to get at that problem without crippling innovation and intellectual property rights.

The patent at the center of the Supreme Court case is a computer-based system for handling financial transactions, largely among banks, that reduces the risk of one party not paying up. It's owned by Alice Corp., an Australian company. CLS Bank International, which won its lawsuit against the patent at the lower court level, uses a financial settlement method that is similar.

The nation's leading software innovators are split on the issue. The intellectual property owners community has lined up in defense of the patent, fearing that the Supreme Court could toss out an entire category of previously issued patents if it rules against Alice Corp.

Software developers, including Microsoft and Google, are on the other side. They draw a distinction between software that makes cellphones work or photoshopping programs that fix photographs and the patent at issue in this case, which opponents liken to computerizing an escrow program.

Victoria Espinel, president of The Software Alliance, says the court should look beyond that particular patent and "give some guidance and some clarity" to lower courts and software developers. That was missing from the last decision in the case, in which the U.S. Court of Appeals for the Federal Circuit - which handles most patent cases - split in seven directions.

Unlike the Federal Circuit, the Supreme Court has not been a fan of patents in recent years. In 2010, it rejected a patent on a method for hedging losses in one part of the energy industry by investing in other parts. Two years later, it nixed a patent on a method of measuring the optimum dose of drugs while they are given to patients. And last year, it ruled that human genes can't be patented.

Now comes the issue of computer software, an industry that doses the U.S. economy to the tune of more than $250 billion annually. Software exports generate more than $20 billion a year. Nearly 3 million Americans work for more than 100,000 software and information technology companies.

Briefs submitted by IBM, Microsoft and Google have garnered the most attention among the more than 40 filed on both sides of the issue.

IBM leans toward maintaining patent protection. "The world's most innovative and productive software companies are all U.S. companies," it notes.

Microsoft leans the other way, but Google is even more emphatic in arguing against too many patents. "A plague of abstract computer-related patents is impairing and taxing innovation in the high-tech sector," its brief to the court contends.